Copyright Act
The AHRA is probably not the solution for the copyright prob-lems that the recording industry faces when it comes to on-line music and devices such as the Rio. However, President Clinton recently signed into law a new act that promises to balance the in-terests of both copyright owners and consumers with regards to the
137. See Diamond Multimedia, 29 F. Supp. 2d at 631.
138. See Robert Lemos, ZDNet News: Hacked Rio to Pose Legal Problems?, (Jan. 27, 1999) <http://www.zdnet.com/zdnn/stories.html>.
Internet.139 For the purposes of this discussion regarding the threat of Rio-type devices on copyright rights, the two most important aspects of the Digital Millennium Copyright Act of 1998 (“DMCA”)140 are the implementation of two World Intellectual Property Organization (WIPO) treaties regarding copyright protec-tion measures and the establishment of provisions limiting copy-right infringement liability for Internet service providers (ISPs).141 Congress did not draft the DMCA with the express purpose of di-rectly limiting the use of Rio-type devices for playing unauthorized music files. However, the DMCA may ultimately discourage pi-racy on the Internet.
2. Liability for Circumventing Copy Protection Schemes Title I of the DMCA, titled the “WIPO Treaties Implementa-tion”, protects technological measures used by copyright owners to protect their works on the Internet.142 The Act prohibits users from circumventing “a technological measure that effectively controls access” to copyrighted material.143
The DMCA’s prohibition on circumventing technological measures designed to protect copyrighted material will probably have little practical effect on a device such as the Rio. As previ-ously discussed in the analysis of the AHRA,144 the nature of the Rio is such that copy management systems are ineffective to con-trol any unauthorized reproduction of copyrighted works. The Rio is designed to download files from a computer into its onboard memory for playback. It is not designed to make copies of these
139. See H.R.REP.NO. 105-551(II), at 20-21 (1998).
140. See Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998).
141. See H.R.REP.NO. 105-551(II), at 21. Other provisions of the DMCA which are not relevant to this discussion, address ephemeral recordings, exemptions for libraries and archives, exemptions for computer maintenance servicers, and curiously, a section regarding protection for original vessel hull designs in the marine industry.
142. See Digital Millennium Copyright Act §§ 1201-1205, 112 Stat. 2860 at 2863-76.
143. See Digital Millennium Copyright § 1201(a), 112 Stat. at 2863. It should be noted that this prohibition does not take effect for two years after the enactment of the Act. See id.
144. Supra Part III.A.3.b.
works and, accordingly, has no independent recording function.
Therefore, it is unlikely that the manufacturers of Rio-like devices will equip them with copy management systems. If there are no copy management systems on these machines, there will obviously be no way for a user to violate the DMCA’s prohibition on the cir-cumvention of such systems.
Moreover, the Rio does not fit under the Act’s definition of de-vices that are prohibited by the anti-circumvention provisions.
Under section 1201, the DMCA defines these devices as those which are primarily designed to circumvent technological control measures or which have little use outside of circumventing copy-right controls.145 In fact, Congress acknowledged that they did not intend this section to apply to products such as the Rio that are ca-pable of commercially significant noninfringing uses.146 Examples of the products that Congress did not intend to include under the anti-circumvention provisions are videocassette recorders, tele-communications switches, personal computers, servers, and other consumer electronics and computer products used for perfectly le-gitimate purposes.147 The Rio seemingly fits within these catego-ries of devices. Additionally, Congress intended for this section to outlaw “so-called ‘black boxes’ that are expressly intended to fa-cilitate circumvention of technological protection measures for purposes of gaining access to a work.” Again, the Rio and related portable MP3 playback devices are more akin to mainstream con-sumer products than to “black box” machines designed to pirate protected works. Based on an evaluation of the legislative reports regarding the passage of the DMCA, it is unlikely that Congress
145. According to section 1201(a)(2):
No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—
(A) is primarily designed or produced for the purpose of circumventing a tech-nological measure that effectively controls access to a work protected under this title;
(B) has only limited commercially significant purpose or use other than to cir-cumvent a technological measure that effectively controls access to a work pro-tected under this title;. . . .
Digital Millennium Copyright Act § 1201(a)(2)(A)-(B), 112 Stat. at 2864.
146. See H.R.REP.NO. 105-551(II), at 38.
147. See id.
would have considered portable MP3 playback machines as de-vices that would be prohibited by the Act.148
3. Limitations on Internet Service Provider Liability Safe Harbors for End-Users’ Transmissions and Caching Incident to Those Transmissions
While the anti-circumvention provisions of the DMCA will probably not prevent Rio users from listening to unauthorized MP3 files, the DMCA’s limitations on Internet service provider (ISP) liability for copyright infringement appear much more promising as safeguards against on-line piracy. Title II of the DMCA, titled the “Online Copyright Infringement Liability Limitation”, ad-dresses the concerns of ISPs regarding their possible liability for infringing material that consumers transmit using the ISPs’ ser-vices.149 The Act provides a safe harbor for ISPs from copyright infringement liability when a user transmits unauthorized materials over their networks if certain conditions are met by the ISP. To re-ceive the benefit of this safe harbor, an ISP must ensure that: the suspect transmission is initiated by the user and not the ISP; the ISP does not select the transmitted material; the ISP does not select the recipients of the material; the material is not stored by the ISP for a period longer than necessary for the transmission of the mate-rial; and the ISP does not modify the content of the material.150
148. Id.
149. See Digital Millennium Copyright Act § 512, 112 Stat. 2877-86.
150. Section 512(a) states, in pertinent part:
A service provider shall not be liable for . . . infringement of copyright by rea-son of the provider’s transmitting . . . material . . . or by rearea-son of the transient storage of that material . . . if—
(1) the transmission of the material was initiated by . . . a person other than the service provider;
(2) the transmission . . . is carried out . . . without selection of the material by the service provider;
(3) the service provider does not select the recipients of the material. . .;
(4) no copy of the material . . . is maintained on the system . . . in a manner or-dinarily accessible to anyone other than anticipated recipients, and no such copy is maintained . . . for a longer period than is reasonably necessary for the transmission . . .; and
(5) the material is transmitted through the system . . . without modification of its content.
Digital Millennium Copyright Act § 513(a), 112 Stat. 2877-78.
Furthermore, the Act provides ISPs with another safe harbor for the intermediate or temporary storage of infringing material on their networks by an end-user incident to the transmission of these infringing materials.151 To properly invoke this “caching” safe harbor, the ISP must meet the same general conditions as those concerning the transmission safe harbor.152 The practical result of these two limitations on liability is that qualifying ISPs cannot be liable for copyright infringement when one of their subscribers transmit infringing materials over their networks as long as the ISP meets the statutory requirements.
4. Limitations on Internet Service Provider Liability: Safe Harbor for the Storage of Infringing Materials on ISPs’
Networks
If viewed in isolation, the safe harbors for the transmission and caching incident to the transmission of unauthorized materials may seem counterproductive to the protection of copyrights. However, the DMCA balances these safe harbors with another limitation on liability regarding the actual storage of the infringing materials on the ISPs’ networks. These safe harbors taken together have the po-tential to ultimately reduce Internet piracy.
Under the DMCA, an ISP cannot be liable for copyright in-fringement due to one of its users storing unauthorized works on its network as long as it does not have actual or constructive knowledge of the material.153 Once an ISP becomes aware of any
151. See Digital Millennium Copyright Act § 512(b), 112 Stat. at 2878-79.
152. See id.
153. Section 512(c)(1)states, in pertinent part:
A service provider shall not be liable . . . for infringement of copyright by rea-son of the storage at the direction of a user of material . . . on a system . . . if the service provider—
(A)(i) does not have actual knowledge that the material . . . is infringing; (ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or (iii) upon obtaining such knowl-edge. . ., acts expeditiously to remove . . . the material;
(B) does not receive a financial benefit directly attributable to the infringing ac-tivity. . .; and
(C) upon notification of claimed infringement . . . responds expeditiously to remove . . . the material. . . .
Digital Millennium Copyright Act § 512(c)(1), 112 Stat. at 2879-80.
infringing materials stored on its network, it must act expeditiously to remove the files in order to qualify for this safe harbor.154 The Act also requires that an ISP designate an agent to receive notifica-tion of the storage of infringing files on its service from the copy-right owners and details the procedures that copycopy-right owners must follow in notifying the ISP about any unauthorized material.155 This safe harbor provides an incentive for ISPs to eliminate unau-thorized material from their networks once copyright owners in-form them of the presence of any illegal files.
In effect, if copyright owners wish to maintain and protect their rights, they are forced into actively policing cyberspace for poten-tial infringers. This may prove a daunting task for some copyright owners who lack the resources to effectively monitor Internet ac-tivity. However, the record industry, which is spearheading the current movement to regulate Rio-type devices, seemingly has the resources to adequately search the Internet for unauthorized files.
For example, a spokesman for the RIAA recently revealed that, in just one afternoon, they discovered 80 pirate sites offering 20,000 MP3 files.156 The anti-piracy unit of the RIAA is currently the largest department in the association.157 The RIAA currently has the infrastructure in place to battle Internet piracy. The industry group already trains FBI agents on copyright issues, attends con-gressional hearings, presents on-line piracy lectures on college campuses, and employs college graduates to surf for illegal MP3s.158 Since the record industry will directly benefit from eliminating unauthorized MP3 files from the Net, it does not seem overly burdensome to shift the responsibility for tracking down the pirate sites to the record business.
The reason why the DMCA may succeed where past copyright statutes have failed is that the DMCA is a legislative attempt to
154. See Digital Millennium Copyright Act § 512(c)(1)(A)(iii), (c)(1)(C), 112 Stat.
at 2880.
155. See Digital Millennium Copyright Act § 512(c)(2)-(3), 112 Stat. at 2880-81.
156. See Eric Boehm, Download Dastards: RIAA Goes After Music Pirates at Mi-dem, DAILY VARIETY, Jan. 26, 1999 at 10.
157. To place some perspective on the size of the RIAA, the RIAA currently boasts an annual budget of $20 million. See Geoff Edgers, Knocking Boots: On the Front Lines of the Ever-Nastier Bootleg and MP3 War, SPIN, Mar. 1999, at 56.
158. See id.
regulate information rather than devices. It is not the same type of act as the AHRA. The AHRA was an attempt by Congress to con-trol particular types of devices, not necessarily the information that the devices processed and used. As the current battle over the Rio demonstrates, device oriented statutes such as the AHRA run the risk of becoming obsolete due to technological innovations. This risk is less pronounced when a statute concentrates its provisions on regulating information. The DMCA promises to reduce the available forums for MP3 pirates to post their files. As a result of the safe harbors contained in the DMCA, Congress gave ISPs sub-stantial incentives to shut down pirate sites once the ISPs receive notification of their existence on the ISPs’ networks. There will probably be very few ISPs that would risk potential copyright in-fringement liability when they merely have to pull the plug on any pirate users on their systems. Moreover, the cost of policing the Internet is shifted to an entity that has a strong incentive to monitor cyberspace for infringers and the resources to effectively do so – the record industry. The record industry stands to gain from a re-duction in on-line pirated works since it will directly benefit via increased sales of authorized recordings. These incentives that both the ISPs and the record industry have to act as gatekeepers of the information superhighway in regards to copyrighted material will not diminish with the introduction of new devices. The focus of the DMCA on the regulation of information is not dependent on the control of any particular device. Regardless of any technical innovations that may be introduced, the DMCA safe harbors will likely keep both the record industry and the ISPs actively involved in preventing Internet users from making unauthorized files avail-able on-line. As a result, the DMCA will probably provide copy-right protections for a longer period of time than a device related act such as the AHRA. The DMCA is more adaptable to current technological innovations and is less likely to be rendered obsolete by new inventions.
5. Protection of Copyright Management Information To aid copyright owners in identifying authorized and unau-thorized copies of their works, the DMCA makes it illegal for a person to remove or alter any information used by a copyright
owner to identify the work, the owner, or a permissible use of the work.159 This section of the DMCA will protect copyright owners’
efforts to mark their original works, in a manner that is transparent to a consumer, and enable the copyright owners to distinguish be-tween authorized recordings and pirated copies. In order for this section to aid the record industry’s cyberspace policing efforts, re-cord companies will need to mark their musical works with some sort of digital watermark as a matter of procedure. If digital wa-termarking of music becomes common, it is highly probable that this provision of the DMCA will enable the music industry to more easily distinguish between authorized and unauthorized music files. As a result, this portion of the Act has the potential to help the efforts of copyright owners to detect pirated materials on the Internet.
6. A Step in the Right Direction
The DMCA represents significant progress in the legislature’s efforts to ensure that copyrighted material such as musical works are protected in cyberspace. The DMCA provides an incentive for ISPs to act as copyright gatekeepers to the information superhigh-way and does not require the ISPs to actively police the Internet.
Congress made several safe harbors to copyright infringement li-ability available to ISPs on the condition that the ISPs act dili-gently after receiving notice of illicit activity by their users. Since ISPs are not required to act unless they are aware of piracy, the re-cord industry has an incentive to actively monitor the Internet in order to identify infringers. The DMCA also makes monitoring ef-forts by copyright owners easier by prohibiting persons from alter-ing identification information, such as digital watermarks, that the owners place on their works.
The DMCA focuses its protective measures on the monitoring of information rather than devices. This shift of focus reduces the possibility that emerging technologies will render the measures in the DMCA obsolete. The DMCA also includes a provision that targets devices by prohibiting the circumvention of copy protection measures. This provision, however, will not prove effective in
159. See Digital Millennium Copyright Act § 1202, 112 Stat. at 2872-74.
protecting copyright owners from devices such as the Rio because the Rio does not currently ship with any manner of copy protec-tion. As discussed in connection with the AHRA, such a copy pro-tection scheme on a Rio would be ineffective to protect copyrights.
The DMCA will not prevent on-line pirates from initially violating a musician’s copyright if they are so inclined. Nevertheless, the DMCA provides an adequate framework for eliminating unauthor-ized postings. The Act facilitates copyright owners’ efforts to monitor the Internet for illegal postings and provides incentives for ISPs to eliminate the postings once the copyright owners detect them. Consequently, the DMCA should ultimately discourage copyright piracy in cyberspace.
IV. THE NEXT STEP -PROPOSALS AND POLICY
Although the DMCA is a step in the right direction in ensuring that copyrights are protected on the information superhighway, there is always room for improvement to our current system. The recording industry recently formed a coalition to develop security measures in order to confront unauthorized music files on the Internet.160 Dubbed the Secure Digital Music Initiative (SDMI), the coalition hopes to create a method of delivering music over the Internet while still maintaining copyright control over the works.161 The SDMI boasts a powerful group of members including Sony, Warner Brothers, IBM, Microsoft, America On-Line, and even Diamond Multimedia, the makers of the Rio.162 The following are several proposals that Congress and the SDMI could consider im-plementing in their efforts to ensure that musicians are properly compensated for their copyrighted material.
A. Imposition of Royalties on Manufacturers of Portable MP3